PAL To Order Airbus A321s, A330s

Philippine Airlines (PAL), which recently underwent an ownership change, plans to order a large number of AirbusA321s and A330s.

Industry executives say PAL, which is already an Airbus A319/A320 and A330-300 operator, has decided to stay with Airbus. One of the executives said a decision will be announced as early as Aug. 28, but others say it may take longer to announce because no firm contract has been signed yet. Three industry executives say the order will be for 10 A330s and around 44 A321s. No decision has been made yet on the engines, the three executives add.

The A321 order includes some A321Neos, one of the executives says. But the bulk of the A321s on order are likely to be for the existing model, because two of the executives say PAL – as part of the deal – has secured first deliveries of the A321s in 2013.

An Airbus spokesman declined to comment when contacted by Aviation Week. PAL’s spokesman was unavailable for comment and failed to respond to emails sent by Aviation Week.

PAL President Ramon Ang, who is also the president of Filipino conglomerate San Miguel Corp., has said in recent months that he has been negotiating with Airbus and Boeing about placing a large aircraft order.

San Miguel bought 49% of PAL Holdings in April from Filipino billionaire Lucio Tan, and part of the deal was that San Miguel would help PAL to renew its fleet. According to the Aviation Week Intelligence Network, PAL’s narrowbodies are powered by CFM International and all its widebodies, with the exception of its CFM-powered Airbus A340s, use General Electric. The carrier has four Airbus A319s, 14 Airbus A320s, eight Airbus A330s, four Airbus A340-300s, three Boeing 777-300ERs and five Boeing 747-400s, it says.

PAL’s decision to go with the higher capacity A321 is significant, because it currently has no A321s. However, PAL’s largest local competitor, Cebu Pacific Air, has ordered A321s, and that carrier’s CEO-advisor, Garry Kingshott, has said publicly that slot constraints at Manila airport mean the importance of the larger capacity narrowbody “cannot be underestimated.” The fact that the A321 has more seats than an A320 means PAL may plan to also use the aircraft to replace some of its widebodies on short-haul international routes. PAL, for example, operates A340s and 747-400s from Manila to Hong Kong. The A321 has a much lower operating cost than the aging, four-engine widebodies.

As for PAL’s decision to order more A330s, it may be a sign that it is getting ready to eventually take its 777-300ERs off medium-haul Asia Pacific routes, such as those it serves from the Philippines to Australia and Tokyo. PAL originally ordered the 777-300ERs for routes to the U.S.

Some industry executives say Airbus’s sudden ability to provide PAL with 2013 delivery slots for A321s may be the “trump card,” which explains why PAL has gone with Airbus rather than Boeing. Prior to the PAL competition, it was widely thought among airlines, aircraft equipment suppliers and aircraft leasing companies that there were no more 2013 delivery slots available for A320-family and 737 aircraft. If it is correct that Airbus has 2013 delivery slots available, then it may be a sign that some other carriers have either canceled some orders, decided to delay taking delivery of aircraft or want to sell their delivery slots.

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